Correlation Between Cross Country and Seven West
Can any of the company-specific risk be diversified away by investing in both Cross Country and Seven West at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cross Country and Seven West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cross Country Healthcare and Seven West Media, you can compare the effects of market volatilities on Cross Country and Seven West and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cross Country with a short position of Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cross Country and Seven West.
Diversification Opportunities for Cross Country and Seven West
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cross and Seven is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cross Country Healthcare and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media and Cross Country is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cross Country Healthcare are associated (or correlated) with Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Cross Country i.e., Cross Country and Seven West go up and down completely randomly.
Pair Corralation between Cross Country and Seven West
Assuming the 90 days horizon Cross Country Healthcare is expected to generate 3.1 times more return on investment than Seven West. However, Cross Country is 3.1 times more volatile than Seven West Media. It trades about 0.14 of its potential returns per unit of risk. Seven West Media is currently generating about -0.11 per unit of risk. If you would invest 1,120 in Cross Country Healthcare on September 13, 2024 and sell it today you would earn a total of 590.00 from holding Cross Country Healthcare or generate 52.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cross Country Healthcare vs. Seven West Media
Performance |
| Timeline |
| Cross Country Healthcare |
| Seven West Media |
Cross Country and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cross Country and Seven West
The main advantage of trading using opposite Cross Country and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cross Country position performs unexpectedly, Seven West can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Seven West will offset losses from the drop in Seven West's long position.| Cross Country vs. Gamma Communications plc | Cross Country vs. Ribbon Communications | Cross Country vs. Universal Display | Cross Country vs. Entravision Communications |
| Seven West vs. Live Nation Entertainment | Seven West vs. Toho Co | Seven West vs. Superior Plus Corp | Seven West vs. NMI Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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